Clock is ticking for McCormack
To many people, Mark McCormack – the founder and principal owner of IMG – is sports management and sponsorship. Since the Cleveland lawyer first signed up champion golfer Arnold Palmer in 1960, no one has come close to his finesse or grasp of the business.
But change is in the air. Would-be competition has emerged from Interpublic, which recently acquired Advantage International and Alan Pascoe International to create a sizeable, if rather conventionally conceived, rival. Whether an advertising agency group can provide the wherewithal to take on IMG remains to be seen. But IMG would be foolish to ignore the competition.
Further left-field is the challenge from Nike. More than acquiring the rights, Nike seeks to own the event itself – and it has demonstrated the will to spend colossal sums of money in doing so. Earlier this year, for example, it signed a 250m shirt sponsorship deal with the Brazilian national football team, committing the squad to playing five Nike sponsored games a year, for which Nike will then sell the worldwide TV rights. Nike’s recent broking of the 18m transfer of Ronaldo to Inter Milan will also have been noted with interest by IMG executives.
But, if Nike’s sports marketing and entertainment divisions are cutting a dash, they still have a long way to go before effectively challenging the market leader: in geographical coverage, in the diversity of services they offer or indeed, it could be speculated, in their profitability. According to ex-IMG executives McCormack’s company experienced average growth rates of 20 per cent per annum throughout the Eighties and early Nineties – and there is no visible reason for supposing business has slackened since then. On the contrary, IMG has managed to switch emphasis away from pure representation into higher margin areas such as event management and TV rights broking. The 9m fee it stands to gain from NMEC for handling Millennium Dome sponsorship is one small example of its more recent wheeler-dealing.
But the one adversary McCormack can never beat is Old Father Time. At 66, like that other ageing dynast Rupert Murdoch, he is sifting about for a succession management. Since he owns 90 per cent of the company, his will be the decisive voice in determining what form it takes. The trouble is, whichever way he leans is likely to prove turbulent for the company. It is difficult to see how he can square both family interests and those of his principal lieutenants – on whom much of his success relies. And whatever McCormack does do, it’s unlikely he will subsequently play the shrinking violet. That in itself may cause tensions for IMG’s new top team.
Ah, the joys of people businesses…
Cover Story, page 50
